Operating Income rose 17.7% and now represents 3.3% of revenues (2.8% in 2006) thanks to quality improvement efforts and a re-engineering program.
“2007 was a turnaround year for Valeo marked by a rise in sales (+6.2%) related to growth in emerging countries where Valeo is increasingly present and to customers’ growing appetite for new products developed by Valeo,” the supplier said “The second half results enabled a marked improvement in the group’s performance in 2007 versus 2006.”
Valeo continued its rationalisation policy last year, selling the wiring harness unit and acquiring Irish company Connaught Electronics in order to strengthen its image processing abilities. The rationalisation of purchasing also continued, with “competitive cost” countries now accounting for 37% of total purchases
For 2008, Valeo said it would further increase profitability “in an environment of uncertain automotive markets and stabilised raw material prices”.
“The group reaffirms its objectives for 2010 of an operating margin of 6% and a doubling of the return on capital employed compared with 2006,” Valeo said.
About Pardus, T.Morin said «To enter this business, they ought to know it very well before starting making hasty decisions”. Morin says he would welcome board representation from Pardus as long as the new board member supports Valeo’s strategy and wants to help.
About G.M., it has become less important in Valeo’s global sales. .«We have significantly disengaged from our loss-making contracts with GM,” Morin said. «Conversely, we are doing more and more profitable business with Ford, Asian and German automakers.”